As problems mount, Housing Authority estimates $25B in capital needs

The embattled New York City Housing Authority, which struggled to keep all of its buildings heated during last week's frigid temperatures, is poised to announce a 50-percent increase in funds needed for capital repairs.

In a federally mandated report set to be released later this month, NYCHA will estimate the cost of fixing problems at its 326 developments to be at least $25 billion. That's a significant increase from 2011, when it projected that it would require $16.5 billion over five years to improve its housing stock. The figure will be included in the housing authority's "physical needs assessment," an analysis it must conduct every five years, and was referenced in a recent report from the nonpartisan Citizens Budget Commission.

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It comes as NYCHA is confronting problems on every front: The federal department of Housing and Urban Development proposed cuts last year that would have slashed an estimated $220 million in capital funds, the mayor said last week that state allocations have been slow in coming and the city comptroller just announced plans to audit the authority's heating systems.

"NYCHA's buildings are six years older (since the last assessment), its capital plan funded just 10 percent of the needs identified in 2011, construction costs have grown faster than the rate of inflation and Superstorm Sandy caused $3 billion in damage," the Citizens Budget Commission wrote. "While we do not know what the ultimate cost will be, it is clear that the authority's capital needs are growing at an unsustainable rate. At the current pace it is reasonable to be concerned that NYCHA's needs could soon jeopardize its ability to preserve New York City's public housing stock in the future."

The twice-a-decade report delineates the electrical, mechanical and architectural needs in each of its developments — broken lighting fixtures, malfunctioning air conditioning and heating systems, faulty standpipes — while also taking stock of the interiors of each apartment. Shared facilities like playgrounds and parking lots are taken into account as well.

NYCHA uses the assessment to make a case for more money from the federal government and refers to it when drafting its own capital budget.

But the financial gap between need and reality continually persists.

The housing authority had $1.6 billion in federal subsidies from 2006 through 2010, less than one-quarter of the $6.9 billion it identified in its 2006 physical needs assessment, according to the CBC.

Its needs assessment was conducted during 2011, before Sandy wiped out heating systems and roofs and damaged about 10 percent of system's buildings in late October, 2012. At the same time NYCHA issued a five-year capital plan totaling $2.4 billion, only 15 percent of the $16.5 billion it said it needed for capital fixes.

The current budget, covering 2017 through 2021, relies on $1.8 billion from the federal government in addition to recovery aid for damage from Sandy.

"The significant gap between NYCHA's capital funding and the physical needs assessment required the authority to prioritize the use of its limited resources. In recent years, NYCHA has chosen to invest in securing and sealing exteriors before investing in building systems or interiors," the commission wrote.

Just $22 million of the $2.4 billion was earmarked for improving the interiors of apartments, while $300 million was spent on construction management fees, staff salaries and miscellaneous expenses, according to the commission's report.

"Kitchens and bathrooms [are] the significant portion — it's 43 percent of physical needs and it is the activity we spent the least on. So it obviously has a huge multiplier effect," Deborah Goddard, executive vice president for capital projects, said in an interview. "We are peeling back the roof work, we're peeling back the backlog on boilers and elevators, but we have yet to get to apartments."

NYCHA now plans to focus on fixing apartment interiors, but the structural integrity of a building must take priority, Goddard said. "Why would you do kitchens if something is leaking from the roof?" she said.

The condition of kitchens and bathrooms "run the gamut," she said: Some have chipped counter tops; in other cases plumbing leaks have caused bubbling plaster.

And while the federal government has been cutting funds to public housing for decades, the price of repairs has soared.

"The age of our buildings, the withdrawal of federal support — it's as if we have a loan that we can't pay the interest on," she said.

Council Member Ritchie Torres, a Bronx Democrat who chairs the public housing committee, said the $25 billion need is "astonishing."

"NYCHA is confronting a $25 billion bomb cyclone of its own. We have to come to grips with the fact that there is no federal money coming to public housing," he said in an interview.

The federal cuts did not materialize last year, but as the White House and Congress negotiate a budget, city officials expect public housing to take a hit.

"I think a strong case could be made that the city has to do more to shore up the core systems of public housing," Torres said. "Yes, I agree that the federal government is the principle villain here but we cannot keep pointing the finger at the federal government. … We have the capital funding; we should use it in the service of public housing."

To maintain current funding levels, he said, "is demolition by neglect."

Mayor Bill de Blasio has increased the amount of money City Hall gives NYCHA while waiving fees the housing authority had to pay for police services. But the extra dollars fall short of fixing the deteriorating conditions.

Federally imposed rent caps and reduced operating subsidies complicate matters, because they make it hard for the housing authority to generate a surplus that could support bonds. Instead, it is forming private-public partnerships and relying on a controversial plan to turn over its parking lots for private housing to raise money.

After decades of disinvestment, the state committed $100 million for NYCHA each year over the past few years for capital upgrades, but de Blasio said last week the funds have been slow to materialize. Some of that money is being handled by a state agency, the Dormitory Authority of the State of New York, in consultation with NYCHA.

Asked at a press conference about his priorities in Albany this year, de Blasio replied, "We'd like to see all of the previous commitments made on affordable housing, supportive housing, support for NYCHA. We'd like to see all that actually move and we haven't honestly seen much."

The mayor lamented years of disinvestment in public housing, and assured tenants that the heat was being turned on.

It wasn't enough to fend off an audit of the housing authority's heating systems, which city Comptroller Scott Stringer announced over the weekend.

"Across the city, tenants are suffering without heat and hot water. That's not an inconvenience — it's a crisis," Stringer said. "NYCHA tenants are being left in the cold, in their own homes, by their own government."